The Help to Buy Equity Loan scheme will be closing at the end of this month.
New applications for the loan were closed last year, with new homeowners now facing a race against time to receive their payment before the scheme is closed.
The Government have announced a series of conditions with deadlines for current users of the scheme who have not claimed their Equity Loan yet. There are also cut off for bonuses and suggestions for alternatives to Help To Buy.
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When does Help-to-Buy end and how can the Equity Loan be claimed?
New applications for the Help to Buy: Equity Loan closed on October 31 last year. With this loan, the repayable amount rises or falls with the home’s value, and is repaid when the home is sold.
Payments for this loan will come to an end on March 31. To be eligible for the loan, you must legally complete by March 31 and are expected to have the keys to your home by 6pm.
Your homebuilder must finish building your home by March 17 so it is ready to move into. This is known as 'practically complete'.
When do the bonuses from the Help to Buy ISAs end?
The 25% bonus available from Help to Buy ISAs will still be available after March. The deadline for claiming this is December 1, 2030. The bonus is payable from when you complete the purchase of your home.
What if my home is not ready by then?
You should check with your homebuilder if your home will be practically complete by March 17. If the house cannot be finished by this time, the housebuilder must return your reservation fee in full.
If you have exchanged, the housebuilder must unconditionally release you from the contract and return your deposit. The Government has advised contacting your conveyancer for advice in this situation.
Will there be any extra fees?
There are no other fees with the Equity Loan. However, you may have to pay related costs and fees involved in the purchase. This includes the costs of legal and financial advice.
Can details be changed on a current Help to Buy application?
If any details on your Property Information Form need to change, you must contact your Help to Buy agent immediately. Certain changes will not be possible.
Please note you cannot change the property you have reserved for Help to Buy at this stage. This would require a new application, which are no longer being accepted.
What are the alternatives for the Equity Loan?
There are no current plans to replace the Help to Buy Equity Loan as of yet. However, the Help to Buy ISA already has a replacement in the form of the Lifetime ISA (LISA).
LISA also offers a 25% bonus on savings, though you can deposit more and over a longer timeframe than the Help to Buy ISA. This means the potential bonus is much higher.
Another key difference is that LISA imposes a 25% penalty if the money is withdrawn, which removes the bonus. By contrast, the Help to Buy ISA merely witholds the bonus in this situation.
To transfer from a Help to Buy ISA to a LISA, open a LISA and ask to transfer the funds from the Help to Buy ISA to the LISA. If you have more than £4,000 in your Help to Buy ISA, you will need to move £4,000 now and then ask to transfer the rest during the next tax year.
Are there other Government ownership schemes available?
The Government have directed aspiring homeowners to it's Own Your Home website. On this website there are details on other schemes currently in operation.
There is Shared Ownership, a part rent, part buy scheme. First Homes offers first time buyers and key workers discounts of 30% or more on new homes.
Stamp Duty and Right to Buy are still available too. For more information about these schemes visit the Own Your Home website.
You find out more information about the Help to Buy scheme ending by visiting the Government's FAQs page here.
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